Forexpros – Copper futures were off the highest levels of the day during European morning trade on Thursday, re-approaching the previous session’s four-and-a-half month low following data showing more gloom about the global economy.
On the Comex division of the New York Mercantile Exchange, copper futures for July delivery traded at USD3.425 a pound during European morning trade, adding 0.85%.
It earlier rose by as much as 1.8% to trade at a session high of USD3.452 a pound. Prices touched USD3.386 a pound on Wednesday, the lowest since January 10.
Copper futures came off the highest levels of the session after Markit said that manufacturing activity in the euro zone contracted at the fastest pace since June 2009 in May. Its preliminary manufacturing purchasing managers’ index fell by 0.9 points to a seasonally adjusted 45.0 in May from a final reading of 45.9 in April.
The report came after Markit said that its German manufacturing purchasing managers’ index declined to a seasonally adjusted 45.0 in May from a final reading of 46.2 the previous month.
Reduced levels of output, new orders and employment meant that the headline German manufacturing PMI fell to its lowest since June 2009.
A separate report showed that manufacturing activity in France contracted at the sharpest rate since April 2009 in May, while service sector activity contracted at the same pace from last month
The data came after a report showing that Chinese manufacturing activity remained in contraction territory for the seventh consecutive month in May, fuelling concerns over a deeper-than-expected slowdown in the world’s second largest economy.
China is the world’s largest copper consumer, accounting for almost 40% of world consumption last year. Fears over a slowdown in copper demand from the Asian nation have been weighing on prices lately.
Copper is sensitive to the global economic growth outlook because of its widespread uses across industries.
Copper traders also remained risk adverse after Wednesday’s summit of European Union leaders made little signs of progress in tackling the debt crisis in the region.
Leaders reiterated that they want Greece to remain in the euro area, but urged the country to honor its commitments to austerity measures and the reforms demanded under its bailout program.
Europe as a region is second in global demand for the industrial metal. Prices have tracked investor sentiment toward the euro zone’s debt crisis in recent months.
Elsewhere on the Comex, gold for June delivery rose 0.45% to trade at USD1,555.35 a troy ounce, while silver for July delivery gained 0.8% to trade at USD27.74 a troy ounce.
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